What is Fat FIRE?
Fat FIRE means reaching financial independence with enough saved to keep a comfortable, high-spending lifestyle after you stop working. Where it starts is fuzzy: Boldin puts it at upwards of $80,000 a year, while ProjectionLab starts it at $200,000. At a 4% withdrawal rate, $100,000 a year needs $2,500,000.
How the calculator works
Pick a budget or type your own yearly spending in today's dollars, then set your withdrawal rate and the share of each withdrawal you expect to lose to tax. The calculator turns those into the amount you need invested the day you stop working.
Fat FIRE number = yearly spending ÷ (1 − tax rate) ÷ withdrawal rateWith no tax, that's 25 times your spending at 4%. Tax raises the amount you have to withdraw to end up with the same spending.
Why tax gets its own field here
On a modest budget, taxes in retirement are often small, especially once you count the standard deduction. On a big one they aren't. If most of your money is in a traditional 401(k) or IRA, every withdrawal is ordinary income, and larger withdrawals reach higher tax brackets. Selling taxable investments adds capital gains tax on the growth.
That's why the tax field starts open on this page. Enter your expected effective rate: total tax divided by total withdrawals, not your top bracket. If you're not sure, 15% to 25% is a common range for large traditional-account withdrawals, and less if much of your money is in Roth accounts.
Add Social Security or a pension if you'll have one. High earners often qualify for larger benefits, and they shrink a big number by a lot.
The safety valve a big budget has
A large budget usually includes a lot that's nice to have: travel, dining out, a newer car, help around the house. That gives you something a lean budget doesn't. In a bad year for markets you can trim those for a while and leave your essentials alone. Withdrawing less while prices are down is one of the most effective ways to protect a portfolio early in retirement.
It helps to split your number in two when you plan: what you need for the basics, and what you'd like on top. If the basics alone are covered at a cautious withdrawal rate, the rest of your budget can bend with the markets without putting your retirement at risk.
Three worked examples
Example 1: $120,000 a year
A household wants to keep spending $120,000 a year after they stop working, with taxes already counted in that figure. They use a 4% withdrawal rate.
| Spending per year | $120,000 |
|---|---|
| Withdrawal rate | 4% |
| Fat FIRE number | $3,000,000 |
|---|
25 times $120,000 is $3,000,000. Because they entered spending with tax already included, the tax field stays at 0. Counting it again would overstate what they need.
Example 2: $150,000 a year with taxes
Another household wants $150,000 a year to spend. Almost everything is in traditional retirement accounts, and they expect about 20% of each withdrawal to go to tax.
| Spending per year | $150,000 |
|---|---|
| Tax on withdrawals | 20% |
| Withdrawal rate | 4% |
| Withdrawn per year before tax | $187,500 |
|---|---|
| Fat FIRE number | $4,687,500 |
| Without the tax | $3,750,000 |
To keep $150,000 after tax they withdraw $187,500 a year, and that takes $4,687,500 invested. Ignoring tax would have put the target at $3,750,000, which is short by almost a million dollars.
Example 3: retiring at 55 with Social Security
A couple plans to stop working at 55 and spend $100,000 a year. Between them they expect $45,000 a year of Social Security from 67, after tax and in today's dollars.
| Spending per year | $100,000 |
|---|---|
| Retire at | 55 |
| Social Security | $45,000 a year from 67 |
| Withdrawal rate | 4% |
| Fat FIRE number | $1,841,730 |
|---|---|
| Without Social Security | $2,500,000 |
Their benefits cut the number from $2,500,000 to $1,841,730. For the 12 years from 55 to 66, savings pay the full $100,000, which is why the drop is smaller than the benefits alone might suggest.
Fat FIRE, regular FIRE and Lean FIRE
The labels are just budget sizes. The math is the same for all of them, so the target grows in step with what you spend. At a 4% withdrawal rate and with no tax or other income:
| Yearly spending | Often called | FIRE number |
|---|---|---|
| $40,000 | Lean FIRE | $1,000,000 |
| $60,000 | Regular FIRE | $1,500,000 |
| $100,000 | Fat FIRE | $2,500,000 |
| $200,000 | Fat FIRE by any definition | $5,000,000 |
Going from a regular to a fat budget isn't a small step. Each extra $10,000 of yearly spending adds $250,000 to the target, and the years it takes to save that are years you keep working. Some people decide the extra comfort is worth it. Others settle on a middle budget and leave earlier. The Lean FIRE calculator starts from the other end.
Why Fat FIRE numbers vary so much
- Where the line is drawn. Sources disagree by more than double, from $80,000 a year to $200,000. The label doesn't matter. Your own budget does.
- Taxes. Most simple calculators leave them out. On large traditional-account withdrawals that can understate the target by 20% or more.
- The withdrawal rate. Some people with big portfolios use a lower rate for extra safety, others plan to spend flexibly and use a higher one.
- Today's or future dollars. A tool that grows your spending by inflation until retirement shows a much bigger number than one in today's money, even though they describe the same plan.
What this calculator doesn't do
- It uses one flat tax rate. Real tax bills depend on how you mix traditional, Roth and taxable withdrawals, Roth conversions, state tax and the year you start Social Security.
- It doesn't include estate taxes, gifts or money you want to leave to heirs.
- It doesn't price long-term care or health insurance separately. Put expected costs into your yearly spending.
- It assumes your spending stays flat in real terms. Big one-off costs, like a second home or college, are better saved for separately.
Common questions
What is Fat FIRE?
It's financial independence without cutting back: enough invested to keep spending well above a typical retirement budget after you stop working. Most definitions start somewhere between $80,000 and $200,000 a year.
How much do you need for Fat FIRE?
At a 4% withdrawal rate, 25 times your yearly spending, plus extra to cover tax if your savings are mostly pre-tax. $100,000 a year needs $2,500,000 before tax, and $200,000 a year needs $5,000,000.
Is $3 million enough to retire early?
At 4%, $3,000,000 supports $120,000 a year. If you retire before about 55, a 3.5% rate is more cautious and supports about $105,000. Taxes on traditional-account withdrawals come out of those amounts.
How do taxes change a Fat FIRE number?
If part of each withdrawal goes to tax, you have to take out more to keep the same spending. With a 20% effective rate, $150,000 of spending means withdrawing $187,500 a year, and the target rises by a quarter.
Should Fat FIRE use a lower withdrawal rate?
Not because the budget is big. A lower rate makes sense for long retirements. But a large budget usually has more room to cut in a bad market, which is a kind of safety a lean budget doesn't have.
Can I reach Fat FIRE faster?
The biggest lever is the budget itself, since each $10,000 of yearly spending is $250,000 of savings at 4%. The other is starting to coast: once your investments can grow into your number by themselves, the Coast FIRE calculator shows when you could stop saving.
Sources
- Boldin. FIRE Retirement Calculator: How can I retire early? www.boldin.com/retirement/fire-calculator
- ProjectionLab. What is Lean FIRE? projectionlab.com/financial-terms/lean-fire
- Cooley, Philip L., Carl M. Hubbard and Daniel T. Walz. "Retirement Savings: Choosing a Withdrawal Rate That Is Sustainable." AAII Journal, February 1998. Usually called the Trinity study.
- Jeske, Karsten (Early Retirement Now). The Safe Withdrawal Rate Series. earlyretirementnow.com/safe-withdrawal-rate-series
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